Conveyors: CEMA fall meeting shows industry on the rise

Earlier this month, Modern reported that the Conveyor Equipment Manufacturers Association (CEMA) reported that its July 2010 Booked Orders Index was 131. Index in July is down 36 points or 22% from June 2010’s index of 167. While down from June, the July 2010 index represents an increase of 49% from the July 2009 Index of 88.

CEMA’s baseline calculation uses the year 1990 as a comparison.  Numbers to the right of the equation show the current state of the conveyor industry as compared to 1990.  Therefore, anything above 100 indicates growth; while anything less indicates a contraction in the industry.

In an interview with Modern at that time, Bob Reinfried, CEMA’s executive vice president, said, “The conveyor industry had a very, very good month in June.  It’s not that July was a disappointment, it was just the norm.  And it’s still better from where we were in July in 2009.” 

Reinfried admitted that CEMA saw good numbers in June, but explained that it was too early to tell if we should expect the numbers to continue to climb and would be able to make a better assessment after gathering more information from member companies at CEMA’s Fall Meeting. 

The meeting wrapped in Chicago earlier this week, and here’s what we learned: CEMA reports showed that overall industry orders (bookings) for the first 6 months of 2010 increased 19.6% compared to the same period in 2009, with total orders of $3.46 billion. Additionally, CEMA estimates industry billed sales (shipments) of $3.09 billion in the same period.

So with this information in hand, does Reinfried still forecast an increase of 2% to 3% for the overall North American conveyor market in 2010?  No.  He now expects an increase of 2% to 10%, based on feedback from the two-day meeting.

Reinfried explained that during the course of a number of meetings, only two member companies reported a worst case scenario.  And in that case, that scenario was a flat forecast.  In this economy, flat means they are holding steady.  For the rest of the companies, reports were split down the middle between +1 and +2, Reinfried explained.

CEMA uses a system of +2 to -2 to measure growth.  In this case, +2 is greater than 10% growth and +1 is more than 2% and up 10%.

“Yes, we’re still on target,” Reinfried said “The projected trend for new orders over the next six to 12 months is good.  It looks like things will go up between 2% and 10%.”

CEMA membership is also on the rise.  “Membership rose from 99 member companies in March 2010 up to 106 this month – a net gain of seven in a six-month period, that’s pretty good,” Reinfried said.